chapter 12

Equities

Equities are likely to be the driving force behind many DIY investors’ portfolios. They can be held directly through an ISA, SIPP or Dealing Account or indirectly through funds run by professional managers.

Yes their value can go down as well as up, but since the 19th century equities have outperformed pretty much every other regularly traded asset class by a country mile.

The word ‘equities’ is interchangeable with ‘stocks’ and ‘shares’, and covers all the different types of shares in a company that an investor can buy, hold and sell. A limited company’s owners are its shareholders, so when you buy shares you become a part-owner of the company.

Investors can profit from holding shares in two ways – when the company pays ...

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